MURPHY v. Simon Sheppard, “John Doe” and “Jane Doe”, Respondents-Undertenants-Respondents.

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Supreme Court, Appellate Term, New York.

Stephen MURPHY and George Krause, Petitioners-Landlords-Respondents, v. Ernest W. CARTER III, Respondent-Tenant-Appellant Simon Sheppard, “John Doe” and “Jane Doe”, Respondents-Undertenants-Respondents.

Decided: March 30, 2007

Present:  McKEON, P.J., McCOOE, SCHOENFELD, JJ. Legal Services, New York City (Gerald B. Liu of counsel), for appellant. Rizpah A. Morrow, New York City, for Stephen Murphy and another, respondents.

Order (John S. Lansden, J.), entered May 26, 2005, reversed, without costs, landlord's motion denied and matter remanded for further proceedings.

This summary eviction proceeding, premised upon allegations that tenant overcharged a roommate (respondent Sheppard) in violation of Rent Stabilization Code (9 NYCRR) § 2525(7), is not ripe for summary disposition.   Even assuming for purposes of this appeal that the relationship between tenant and Sheppard was that of roommates even though designated as that of tenant and subtenant in their March 2000 written agreement (compare Ishida v. Markowicz, 18 A.D.3d 502, 795 N.Y.S.2d 258 [2005] ), the record so far developed raises triable issues as to the extent, chronology and duration of any claimed overcharges. The landlord's moving submission relied heavily upon respondent Sheppard's equivocal deposition testimony, which left unanswered several key questions concerning the dates and amounts of his cash rental payments to tenant, and was insufficient to meet landlord's burden to establish the absence of material issues of fact.   We thus need not consider whether the tenant's professed mental infirmities provided an adequate excuse for his failure to lay bare his proof in opposition (see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).   In the posture of this case, and given the unsatisfactory and incomplete state of the record, the proper forum is a trial, not a motion for summary judgment.

Nor may we consider on this appeal whether tenant is entitled to summary judgment dismissing the petition, since tenant neither formally moved for summary judgment in Civil Court nor now requests that we search the record and grant such drastic relief on appeal (see Gibson v. American Export Isbrandtsen Lines, Inc., 125 A.D.2d 65,72, 511 N.Y.S.2d 631 [1987] ).

I agree with the Majority that summary judgment was improperly granted to the petitioner landlords but would grant summary judgment to the respondent tenant.

The landlords moved for summary judgment seeking to evict the tenant from his apartment on the ground that he charged a roommate more than a proportional share of the rent in violation of Rent Stabilization Code Sec. 2525.7(b).

This rent stabilized tenant has occupied the subject premises for twenty-five years and is a mentally disabled individual in his mid-forties who suffered traumatic brain injuries in the 1990s.   This has resulted in severe memory loss, depression and post-traumatic stress disorder.   He is a client of the Center for Independence of the Disabled in New York which provides counseling, assistance with memory problems and training in independent living skills.   Part of his rent has been paid at times by a social service group for the mentally disabled.   A Guardian ad Litem was appointed for the tenant during the Housing Court proceeding.

Respondent Simon Sheppard was tenant's roommate from March 2000 to May 2002.   RSC Sec. 2525.7(b) was enacted on December 20, 2000 (9 NYCRR § 2525.7).   Sheppard allegedly paid the tenant rent ranging from $520 to $620 per month.   During this period the legal rent for the apartment ranged from $795.95 per month to $908.06 per month.   Sheppard had a furnished room, a separate entrance to the apartment, full use of all rooms of the apartment and access to the tenant's vacuum cleaner, cleaning supplies, etc.

After issue was joined and discovery was completed, the landlords moved for summary judgment arguing that they had established an overcharge and that tenant had not refunded the excess rent to Mr. Sheppard who no longer resided in the apartment.   There is no claim that Mr. Sheppard even requested a refund for the overcharge 1 or that the tenant knew of the change in the law restricting the amount of rent which could be charged to a roommate.   The landlords relied upon the deposition testimony of Mr. Sheppard as to the amount of rent he paid and an affidavit from one of the landlords attesting to the overcharge in support of their motion.

The tenant opposed the motion with only an attorney's affirmation arguing that there was no clear factual basis to determine the exact amount of the overcharge.   No affidavit from the tenant or his Guardian ad Litem was submitted.

The Motion Court in an eight page decision concluded that “Petitioner is awarded summary judgment based on the lack of an affidavit from a person with knowledge in opposition.”

The court acknowledged that tenant's inability to remember events, facts, dates, and times, with his cognitive deficits, made it “extremely difficult” for tenant to defend this proceeding.   The court noted that the Guardian ad Litem, appointed to protect the tenant's interests, had not submitted an affidavit in opposition to the motion.

The decision stated that, “It would not have been very difficult to tender the refund at the deposition ․” and “make arrangements for a refund.”   Further that “․ it would be improper for this Court to require Petitioner to bear the cost of a trial where no issue of fact or law has been raised.”   The Motion Court granted a final judgment of possession staying execution of the warrant “upon condition that all arrears are satisfied by June 20th, 2005.”

I disagree with the Motion Court's granting of summary judgment to the landlords and would search the record and grant summary judgment to the tenant for the reasons stated in my dissent in First Hudson Capital, LLC v. Seaborn, 15 Misc.3d 40, 833 N.Y.S.2d 834 [2007] decided this date.   This relief is available “․ even in the absence of an appeal by the nonmoving party” (Merritt Hill Vineyards, Inc. v. Windy Heights Vineyard, Inc., 61 N.Y.2d 106, 111, 472 N.Y.S.2d 592, 460 N.E.2d 1077 [1984];  see also CPLR § 3212 [b] ).

The landlords have failed to make a prima facie case of entitlement to judgment as a matter of law even if its proof is accepted as true.  “Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers” (Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ).   The landlords have failed to establish as a matter of law that the overcharge constituted commercial exploitation.

Accepting the fact that there was an overcharge, the Motion Court did not find that the landlords established that the overcharge constituted “profiteering” or “commercial exploitation” warranting eviction.   Absent this finding, a judgment of possession should not have been granted.   The only basis for the granting of summary judgment by the Motion Court was the lack of an affidavit in opposition by a person with knowledge.

Furthermore, and while not necessary for this decision, summary judgment was improperly granted because there was an issue of fact as to the amount of the overcharge.   The Motion Court did not establish the amount of the overcharge because, as the Motion Court's decision indicates, Sheppard could not specify the amount of rent that he had paid.   Sheppard had no receipts and at least part of the rent was paid in cash.   Additionally, summary judgment should be denied where the issue of damages and liability are intertwined (see 2 Byer's Civil Motions, § 77.24 [Leventhal Second Revised Edition] ).

I would reverse the Order granting summary judgment to the petitioner landlords and grant summary judgment to the respondent tenant dismissing the petition.

This constitutes the decision and order of the court.


1.   Mr. Sheppard, who was subpoenaed for this deposition, acknowledged receiving a check from the tenant in the amount of $105 but he did not cash it.   Even if cashed, the $105 did not represent a full refund of the overcharge.